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Bedbugs Bad for Business? Depends on the Business

Jonell Bolivar uses steam to fight bedbugs at the Chancellor Hotel in San Francisco.Credit
Noah Berger for The New York Times

Recent reports that bedbugs have infiltrated office buildings, movie theaters and stores in New York did not come as a surprise to Wes Tyler, general manager of the Chancellor Hotel on Union Square in San Francisco.

“Short of putting a bedbug-sniffing beagle at your door to check everyone before they come in, you’re going to get bedbugs,” he said. “Dealing with them is the cost of doing business these days.”

An employee first discovered a bedbug in the 137-room hotel in 2003, and Mr. Tyler has since instituted a comprehensive bedbug detection program to find the blood-sucking insects before a guest does. For starters, Mr. Tyler created a position called “bedbug technician” — an employee whose sole job is to go from room to room checking for bedbugs. There is also a bedbug bounty of $10 paid to any employee who finds one.

If a bedbug is found, the room and all adjacent rooms are taken out of service for up to five days while they are steam-cleaned and chemically treated to eliminate the bugs and their eggs. The mattresses in the rooms are also discarded. The total cost for each room is $2,500, including lost bookings.

“It sounds like a lot of money, but the value of a good reputation is infinite,” Mr. Tyler said. “Your biggest fear is that someone will get bitten and post something about it on an online travel site, and that’d be a killer.”

Bedbugs used to be solely a residential problem, but they are showing up in commercial settings, and not just in places with beds like hotels, nursing homes and apartment complexes. Increasingly, pest control companies report finding bedbugs in office buildings, movie theaters, clothing stores, food plants, factories and even airplanes. For the affected businesses, the expense can run into the hundreds of thousands of dollars. For the companies that deal with the scourge, it is a bonanza, with business doubling and tripling.

Photo

Scooby’s nose finds bedbugs. Linda Develasco, who does inspections for the insects, said she bought the dog for $9,700 and made that back in three months.Credit
Peter Thompson for The New York Times

The costs of coping with bedbugs are significant, and they are not covered by most insurance policies because they are seen as a maintenance issue. Hiring bedbug-sniffing dogs, which is considered the most effective detection technique, costs about $250 for a 1,200-square-foot retail store and as much as $10,000 for a million-square-foot department store.

“To stay ahead of bedbugs, I recommend having the dogs come through quarterly,” said Pepe Peruyero, chief executive of J&K Canine Academy in High Springs, Fla., which trains bedbug-sniffing dogs and offers inspections for large buildings like department stores and school dormitories. However, he added, many customers cannot afford it and instead choose to rely on the vigilance of employees after an initial dog check comes up clean.

Eliminating infestations is also costly, ranging from $750 for a few rooms in an office building to $70,000 for a large apartment complex. And that is just for the application of the cocktail of pesticides that kills bedbugs. It costs an additional 40 percent for the gold standard regimen of placing all the contents of an office or retail space into a heat chamber — bedbugs die at 120 degrees — and then spraying pesticides in the temporarily empty rooms.

“It takes about four to seven hours per room” for the combination heat and pesticide procedure and a couple of hours on three separate occasions if using pesticides alone, said Judy Black, technical director for the Steritech Group, based in Charlotte, N.C., which provides pest control and other quality control services to commercial customers. “Getting rid of bedbugs is not quick or easy.”

Businesses lose money when they have to interrupt operations. In addition, they may have to destroy bedbug-infested merchandise. Abercrombie & Fitch, for example, had to close two of its stores in New York in July, one for four business days and another for five, to deal with bedbug infestations. A representative confirmed disposing of merchandise but declined to comment on the cost.

The managements of the Empire State Building and the AMC Theater chain were similarly tightlipped about the cost of dealing with recent bedbug infestations.

“Nobody wants to talk about this even though it’s happening everywhere,” said Ron Harrison, director of technical services for Orkin, a pest control company based in Atlanta, whose commercial business has more than tripled since 2008. “I spoke at the Mobile, Ala., chapter of the National Apartment Association and asked for a show of hands of who had experienced problems with bedbugs, and not a single hand went up, and right there in front of me were three of our customers who I know had us out to treat for them.”

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If a bug is found at the Chancellor Hotel in San Francisco, that room and those next to it are closed, steam-cleaned and chemically treated, at a cost of $2,500 each, including lost bookings.Credit
Noah Berger for The New York Times

The silence, of course, is to avoid the stigma of an infestation. Even if businesses manage to avoid media attention, they may end up on one of several Web sites like bedbugregistry.com and bedbugreports.com, which encourage people to report hotels, apartment complexes, offices and retailers where they saw or were bitten by bed bugs.

“It’s been nonstop drama dealing with hotels disputing claims,” said Maciej Ceglowski, a computer programmer in San Francisco who started bedbugregistry.com in November 2006 after he was bitten by bedbugs in a local hotel. “Everyone is scared of being publicly outed and losing business.”

There is also a real fear of liability. Bedbug-related lawsuits have been increasing since 2003, and several lawyers now advertise themselves as specialists in such litigation. Typical is a recent case filed against Aaron’s Sales and Lease in Norristown, Pa., by a woman who contends furniture she bought there had bedbugs. In court documents, she said she wanted at least $50,000 in compensation because the bedbugs not only gave her itchy welts but also caused her to lose her hair and her job as an attendant at a nursing home.

“Most bedbug suits are settled out of court for less than $5,000, but I’ve seen damages go as high as six figures,” said Christian Hardigree, associate professor at the William F. Harrah College of Hotel Administration at the University of Nevada, Las Vegas, and a lawyer who has consulted on bedbug cases involving hotels, cruise ships, movie theaters and nursing homes. “It can be a nightmare for businesses because a lot of claimants in these cases are treating the litigation system like a lottery and are going after the big win.”

In addition to personal injury law firms, other businesses benefiting from the bedbug scourge include Protect-A-Bed, based in Chicago, which makes mattress encasements to keep out mites and bedbugs. The company developed the product in 2004 and had sales of $10 million last year, twice as much as in the previous year, according to James Bell, the company’s chief executive. He predicts an even larger jump in sales this year. “The response has been enormous,” he said.

Bedbugs gave Linda Develasco of Des Plaines, Ill., a new career when she was laid off from her job as a new-accounts manager at Verizon two years ago. Having learned about bedbugs in the hospitality industry from her fiancé, who was general manager of a hotel, she bought a bedbug-sniffing beagle named Scooby for $9,700. She recouped the expense within three months by doing one to three inspections each week. “He was worth every penny,” said Ms. Develasco, who had been doing mostly residential work but within the last week began inspecting office buildings, retail stores and movie theaters. “It’s been crazy.”

Exterminators are also enjoying a windfall after several years of declining revenue as customers cut back on pest control treatments to save money in the tight economy.

“I just got a $60,000 contract to take care of bedbugs in an apartment complex,” Tony Esposito, owner of the Bug Reaper, a pest control company in Katy, Tex., shouted into his cellphone as he drove to investigate another bedbug complaint in nearby Houston. “I had to pull my truck over and do a happy dance.”

Correction: September 10, 2010

An article on Wednesday about the spread of bedbugs referred incorrectly in some copies to the founding of bedbugregistry.com, a Web site that reports infestations. It was started in November 2006, not this past November.

A version of this article appears in print on September 8, 2010, on page B1 of the New York edition with the headline: Bedbugs Bad for Business? Depends on the Business. Order Reprints|Today's Paper|Subscribe